Analysis On Property Insurance Marketing Channel Patterns Of China

Affected by multiple factors such as external financial deterioration of the environment, the macroeconomic slowdown, and sluggish capital markets, China’s insurance industry has eventually entered into the premium growth bottleneck after the rapid development of the golden years.Property insurance industry in China has remained the overall profitability of the year2012, the combined cost ratio has increased whilst the underwriting profit margins has declined. It is expected that this situation will remain but the insurance industry will face further challenges. Property and casualty insurance industry underwriting cycle theory suggests that when underwriting profit grows to a certain extent, the new market players will join the competition, which will lead to the decline in underwriting profit or even a loss, insurance companies with poor management will be forced to leave the insurance market, leaving the rest of the insurance companies only having to raise their rates to reduce losses. Foreign underwriting cycle is generally about6-8years, but in recent years the trend cycles has slightly shortened. Affected by external competitive environment, major property insurance companies have implemented the channel reformation and accelerated the development of new sales channels, and it will become a bigger trend in2013.In the situation of macroeconomic growth, the increasing market players, extensive expansion, product innovation premium income, and even human wave tactics have all made outstanding contributions to the rapid growth of China’s insurance industry in the past decade. Insurance marketing channels have linked the insurance supply and demand sides to meet the customers’needs at the right time and the right place through their marketing channels, insurance products and services. Superior marketing channels can save a lot of cost and time for the insurance companies, which can also help insurance companies to improve operational efficiency. moreover, it is suggested that the more time the companies invest in the development of innovative products, the company’s image maintenance, and personnel training, the better the enterprises could improve their overall strength and adapt to the competitive environment of the market. The traditional marketing model has played an important role in the early stage of the insurance industry in China. However, with the awakening of the national needs for insurances, the insurance market could not meet the increasingly diversified needs anymore. In fact, the development of the insurance industry in the second half of year2011has been quite difficult, the business had rapidly shrank, pay has fallen, investment income has decreased, and a lot of pressure at the same time had hindered the development of the insurance industry. Again in2012, the rising interest rates, dropping stock prices and other external changes in the financial environment made it more difficult for insurance industry. Moreover, the premium growth of income from insurance industry is slowing down, which can also be attributed to the factors of staffing difficulties and channel compression. When the new demand contradiction of the original property insurance marketing channels and customers of insurance marketing model has arisen, only with the expansion of the number in the original level can not solve the problem.The insurance industry in China is still at its critical times of marketing channel innovation and reformation. With the deepening of economic globalization, the focus of competition in insurance industry has shifted to marketing channels. And the main issues faced by all property insurance company are how to get rid of the original extensive marketing mode and how to build up multi channel marketing system. Although the staff direct sale, professional intermediaries and agents have long been the important marketing channels for insurance industry, network and telephone marketing have suddenly emerged and led this industry to further development and more possibilities.The reformation of Property Insurance marketing will be about maximizing the extent to meet the public needs for insurance as well as digging the target of insurance purchasing power resources of the target, improving both the customer resource efficiency and insurance sales efficiency, adapting customer-oriented strategic, therefore the business strategy would focus on customer share rather than just market share. However, traditional insurance marketing channels in China have already saturated, where business growth is slowing down, telemarketing, and the privacy disclosure all had a negative impact on the traditional insurance business. In this situation, light human resource, heavy technology, user oriented online sales channels will become a new growth point in the future for the newly established insurance company, or may become rapidly catch up significant opportunities.This article is going to analyze the existing marketing channels through the property and casualty insurance market in China, discussing its existing problems in the process of development, and the importance of marketing channels expansion to the P&C business’s growth and its market share. Therefore, we can conclude that marketing channels development of insurance industry in China is still staying at the extensive operation stage, which lack of a comprehensive and systematic long-term development plan for both traditional and new marketing channels. It is imperative to make the right choice on marketing channels and proceed bold innovation for current insurance industry as all products and prices are very much alike nowadays.This paper will use a combination of quantitative analysis and qualitative analysis research methods, which based on the P&C marketing channels development in China and a quantitative research about the problems in the industry based upon the qualitative analysis. The paper will also further elaborate the distinction between various channels through the data tables and the market share taken by different property insurance market channels. The aim of the research is to improve our the PICC marketing channels-building framework, which proves the feasibility and operability characteristics of this study.This paper has4chapters,18sections.The introduction part will explain the background and the aim of the study and its significance, and also the basic idea of the paper and logical structure. This paper will use research methods such as linking theory with practice, comparative analysis, and inductive analysis, to produce a unique insights about marketing channels in property and casualty insurance industry with the references from both Chinese and foreign literature. Nevertheless, this paper has many limitations due to the academic standards and objective conditions in where the project is completed.Chapter1will mainly explain the theory used in the paper, the basic connotation of the property insurance marketing channels, including property and casualty insurance marketing meaning, the main mode of our the P&C marketing channels, the importance of the marketing channel construction business property insurance company, and property insurance choice principles of marketing channels. This chapter will be the theoretical foundation for the analysis of China’s property insurance marketing channels.Chapter2will introduce many different marketing channels in insurance industry, for example, the employees’ direct sales channels, professional intermediary channels, agents and industry channels, individual agents, electricity sales, net sales and other emerging channels. on Property Insurance marketing channels through the characteristics, advantages and disadvantages, suitable for sales analysis of the insurance products, to see the plight of traditional marketing channels and new channels in the development of our country, the importance of further leads to channel innovationChapter4will discuss the problems existing on the market through the analysis of various channels, including the comparative analysis of the share of the existing market share, as well as property insurance company channels, marketing channels for our property insurance. And the problems will be drawn, such as serious degree of alienation of the direct sales channel analysis of the current development status of our property insurance sales channels, channel development professional intermediaries, high agents and industry market fees, low quality of the individual agents, low marketing efficiency, the product design does not match.The final chapter will analyze the future trends of the property and casualty marketing in China, that the net and electricity sales channels will become the main cross-selling channels and it will become a new growth point of the industry. With the fact that personal agent system development, insurance intermediaries to "employees" survival of the fittest show as well as the explicitly separation will become a general trend, this chapter will conclusively discuss how Insurance companies should actively conduct channel rectification and innovation, and describing the trends of property insurance marketing channel construction in future in China.